3 Surefire Vanguard ETFs to Buy and Hold in 2026
This ETF is a powerful wealth building machine.
Exchange-traded funds (ETFs) can be a very powerful investment for building long-term wealth. The right ETF can diversify your portfolio, limit risk, and even generate a passive income stream.
As we approach 2026, now is a smart time to consider expanding your portfolio. If you’re nervous about potential market volatility or simply want a few solid investments that have a very good chance of performing well over time, these three Vanguard funds could be fantastic buys right now.
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1. Vanguard S&P 500 ETF
An essential part of many investors’ portfolios Vanguard S&P 500 ETF (flight 1.08%) It’s one of the most popular ETFs for a reason. it is tracked S&P 500 index (^GSPC 1.07%)Includes approximately 500 stocks of the largest and most established U.S. companies.
The S&P 500 ETF is a smart choice for investors looking to mitigate risk because the index itself is virtually guaranteed to survive periods of volatility. In fact, an analysis by Crestmont Research found that in the entire history of the S&P 500, the index has never had a negative total return in 20 years.
To be clear, this doesn’t mean the S&P 500 ETF won’t experience ups and downs in the short term. However, after 10 to 20 years, there is a very good chance of recovery even from a severe recession or bear market.
VOO data from YCharts.
Over the past 10 years, the Vanguard S&P 500 ETF has returned a total of 239% as of this writing. If you invested $5,000 10 years ago, you would have almost $17,000 today. That’s more than tripling your money without any effort.
2. Vanguard Total Stock Market ETF
If you want the relative safety of an S&P 500 ETF but want much more diversification. Vanguard Total Stock Market ETF (VTI 1.14%) It could be a good choice. This ETF aims to cover the entire stock market, including 3,531 stocks from companies of all sizes across all industries. By owning just one share of this ETF, you are essentially purchasing a slice of the entire stock market with a single investment.
Like the S&P 500 ETF, this fund’s main strength is its ability to recover from market turmoil. The market as a whole has an excellent track record of recovering from recessions, and that is unlikely to change anytime soon. In the event of a particularly severe recession, it may take years for the market to fully recover. However, it is likely that it will eventually bounce back.
VOO data from YCharts.
The Total Stock Market ETF has slightly underperformed the S&P 500 ETF over the past decade, with the largest performance gap over the past two years. This makes sense considering the following large-cap stocks: nvidia and apologize Since the S&P 500 only includes large-cap stocks, its narrow focus allows it to take advantage of these gains.
However, the Total Stock Market ETF’s exposure to small- and mid-cap stocks may still offer advantages in some cases. Small businesses typically have more room to grow. If any of these small-cap stocks experience explosive gains, this ETF could benefit from that.
3. Vanguard High Dividend ETF
Invest in ETFs that pay dividends. Vanguard High Dividend Yield ETF (VYM 1.20%)Not only can it help you build wealth, but it can also create a real passive income stream over time. This ETF contains 566 stocks of companies with high dividend yields. It pays quarterly dividends, and its most recent dividend was approximately $0.84 per share. It may not seem like a lot, but it adds up over time. This is especially true if you are constantly buying more shares.
It’s also easier to grow your passive income by reinvesting your dividends. The more you reinvest, the more shares you own. And the more shares you own, the more dividends you can receive and the more you can reinvest. Over time, this creates a snowball effect that can earn you thousands of dollars per year in passive income.
VOO data from YCharts.
The Vanguard High Dividend Yield ETF has underperformed both the S&P 500 ETF and the Total Stock Market ETF over the past decade. But again, its strength is its high dividend yield, but not necessarily its yield. Dividend income can provide some cushion if your portfolio takes a hit during a market downturn.
ETFs can be a fantastic maintenance-free investment for long-term investors. Over decades, the right funds will not only protect your finances, but can also help you build life-changing wealth.
